Investors were looking ahead to the latest Federal Open Market Committee's policy statement on Wednesday afternoon.

Futures for the Dow Jones Industrial Average were falling 13 points, or 3.58 points above fair value, at 13,895. Futures for the S&P 500 were down 2.75 points, or 0.44 points below fair value, at 1502. Futures for the Nasdaq were down 3.75 points, or 1.82 points above fair value, at 2739.

Major U.S. stock averages ended mixed Tuesday as Pfizer(PFE) shares popped on the drugmaker's quarterly report and Apple(AAPL) jumped following a product announcement. Data released Tuesday showed continued improvement in the housing market.

Doreen Mogavero, founder of Mogavero Lee & Co., said there appears to be a change in trends surrounding the inflow of money into stock mutual funds. She said that up until today over the last four years funds have flowed out of mutual funds during market rallies. That means there wasn't much confidence in any of those previous rallies, she said.

"Well now we're seeing people coming back into the market and I think that shows they're starting to feel better about the fact that our companies are very, very lean," said Mogavero. "Now the general thought on Wall Street is that once the retail investor gets back in, well maybe the party is over ... they're usually the last ones to find out the good news."

"But I think in this case it might be slightly different," because companies are the leanest they have been in decades, which could point to some very good earnings ahead, she explained.

The ADP report on private sector employment showed a gain of 192,000 jobs in January, versus a downwardly revised 185,000 the prior month. Economists, on average, were expecting an increase of 165,000 in January.

"Despite a downsizing to the December reading ... we remain optimistic that Friday's official report will leave room for upside revision," said Andrew Wilkinson, chief economic strategist at Miller Tabak.

The Bureau of Economic Analysis, meanwhile, reported that the advanced estimate on U.S. fourth-quarter gross domestic product showed that the economy shrank 0.1% during that period, compared with third-quarter growth of 3.1%. Economists were expecting growth of 1.1%.

David Ader, a strategist at CRT, said that though the GDP data was disappointing, it does not point to a recession. Ader noted that much of the decline was attributable to weak defense spending. Government spending in that sector fell by the most since 1972.

The Mortgage Bankers Association's seasonally adjusted index of mortgage application activity pointed to a decline of 8.1% for the week ended Jan. 26, compared with a rise of 7% the prior month.